Abstract
Credit is regarded as a key factor to maintain the sustainability of cooperation between public authorities and social capitals in Government‐Pay Public‐Private Partnership (PPP) projects. The credit default of local public sectors has become a formidable force to cause termination in several cases. The study aims to explore the critical conditions and main logics behind opportunistic behaviours through literature analysis. In this research, political performance, fiscal illusion, subjective willingness, and objective limitation are identified as four certain conditions. Additionally, the crisp‐set Qualitative Comparative Analysis (csQCA) method is applied to determine the connections between conditions and the credit default in the Chinese Government‐Pay PPP projects according to 15 cases from the field of ecological construction. Consequently, two combinations with complete sufficiency leading to severe extent of credit default are categorized. The configuration of political performance and fiscal illusion is dominant, thereby causing severe extent of credit default in the preimplementation link. Correspondingly, the configuration of subjective willingness, objective limitation, and nonpolitical performance is crucial in the implementation and postimplementation links. Moreover, fiscal illusion alone could be totally sufficient to lead to a termination. This research not only enriches the theoretical system on credit default of public authorities in Government‐Pay PPP projects but also provides reference for all participants to forecast the potential risks especially the credit default in PPP projects.
Highlights
IntroductionOver the past two decades, the Public-Private Partnership (PPP) mode has greatly contributed to the expansion of the supply of urban infrastructures and public services in China [1]
Certain logics under each condition were identified based on the literature review (Table 1). All these conditions could be divided into two aspects according to the processes of the links (Figure 5). at is, political performance and fiscal illusion often occur in the preimplementation period, and subjective willingness and objective limitation occur in the other period
E solution formula above shows two combinations leading to severe extent of credit default. e conditions of political performance (PP) AND fiscal illusion (FI) are both existed OR the condition of political performance is absent AND the conditions of subjective willingness (SW) AND objective limitation (OL) are both existed which will result in severe extent of credit default
Summary
Over the past two decades, the Public-Private Partnership (PPP) mode has greatly contributed to the expansion of the supply of urban infrastructures and public services in China [1]. E PPP mode is widely acknowledged to help release the burden of government spending [3, 4], improve the quality and efficiency of infrastructures [5,6,7,8], promote the transformation of government functions, and market opening levels [9, 10] Under these circumstances, the local public sectors (LPSs) in most provinces issued relevant guidelines and recommendations in response to CPSs [11]. Government-Pay is one of the three subsystems according to the “Operational Guidelines for Public-Private Partnership Mode” issued by CPSs [13] Such subsystem is a payment version based on the Private Finance Initiative (PFI) mode of the UK [14], which has been widely accepted by LPSs. Information shows that more than 90% of PPP projects implemented in China adopted GovernmentPay or Government-and-User-Pay as the returning mechanism for the second quarter of 2018 [15]. En, crisp-set Qualitative Comparative Analysis (csQCA) is applied to elucidate the relationship between critical conditions and the severe extent of credit default from LPSs for Chinese Government-Pay PPP Projects in ecological construction. e findings of this work enrich the theoretical research of credit default among stakeholders and provide reference to regulate the behaviours of LPSs
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